On October 25, 2019, the news broadcast at 7pm Beijing time spent the most precious five minutes talking about only one thing: the country should vigorously develop blockchain technology.
My friend asked me on wechat, “Isn’t it true that some time ago, we also cracked down on digital currency? How is it going to develop vigorously? What that means. This means, I say, that the horns of a digital currency war have sounded. The dollar hegemony established by the United States after the collapse of the Bretton Woods system will face a strong challenge from the mysterious Eastern power.
A lot of people don’t know what blockchain is because they start asking “What is blockchain?” This concept was then confused by various concepts of “blocks”, “mining”, “decentralization”, “two-flower attack”, “Byzantine general problem” and so on.
Let’s say I ask you, “What is a cell phone?”
You don’t look down, you think about it. Define “mobile phone.”
The answer you give is definitely not “portable phone terminal that can be used in a wide range” (from Baidu Baike). I can’t even read that definition.
You say: mobile phones are for making calls, sending wechat messages, swiping Douyin, watching moments.
Similarly, let’s stop obsessing about how blockchain works and ask “What is blockchain for?”
Blockchains are used to jointly record public data, or, more narrowly, to keep accounts.
You said you can use a computer to keep track of your accounts. Why do you want to keep track of blockchain?
Because you keep your own books and no one will believe you. Who are you? Why should anyone believe what you remember?
For example, you write down in your computer that John owes you $10,000, and John says, “I also write down in my computer that you owe me $1 million.” So what?
Before so solve: look for a notary, you both of the account is written down in the notary here, appear dispute with the notary’s account book prevail. That’s what banks do, for example. He’s where you both deposit your money, keep records of transfers, loans.
Block chain solution: you in their own computer bookkeeping, Zhang SAN also in their own computer to record the same data, after good, you two check each other, both agreed, the account is officially recorded. There is no need for the participation of a third party or the so-called “authority” or “certification authority”.
Collective bookkeeping is also known as “distributed” or “decentralized” because everyone keeps books and the accuracy of the books is determined by a program, not an authority.
That’s blockchain. That’s the core. Blockchain is as simple as that, a common ledger.
Bitcoin is the largest application of blockchain in the field of digital finance and digital currency.
You say: Huh? Is it that simple? Yes, it’s that simple.
2 Let’s talk more about bitcoin
Now it’s not just you and Joe, it’s millions and millions of people. How to write? As before, everyone’s computers record each transfer and then check with each other to make sure that millions of computers have the same account, and the account is officially recorded.
To reward anyone who provided a computer to do the bookkeeping, points were awarded at random every few minutes across all the bookkeeping computers. The better the computer, the higher the chance of winning. This billing process is called “mining,” and this credit is called bitcoin.
That’s bitcoin. That’s the core. Bitcoin is that simple. Millions of computers keep the same books together and record how much money each person has (bitcoin).
The rest is a matter of how the technology is implemented. You don’t need to know exactly how, just know that the Bitcoin network has been running for 10 years without any major problems.
Finance is books
Why is bitcoin so valuable, you say, because it’s just a ledger?
Because the financial world is just a giant ledger.
When you think about it, your savings, your stocks, your funds are just numbers in someone else’s book.
The difference is, who has the bookkeeping pen.
To go a little further, the real reason why China and the United States are racing in blockchain finance and arms race is to win the pen that accounts for the whole world. You put your money in the bank, and the pen is in the bank.
You can think for a moment, if one day, the bank’s system went wrong, the balance in your account became 0, how can you prove that you ever had the 386,000 in your account?
Or what would you do if, one day, you were falsely accused and all your bank accounts were frozen? Money that clearly belongs to you can’t be frozen if it’s not in the bank. Now it’s in there and it’s no longer yours. Isn’t that weird?
Of course, this kind of thing will not happen in our country with sound legal system and advanced science and technology. But what about poor countries where banks could fail and local currencies could be worthless at any moment?
How can blockchain change this?
If the account is in the running record of the chain block, so when the bank said your computer crashed can’t check your account records, you can tell him, it doesn’t matter, I recorded in the computer, and not just in my computer, and millions of computer also have and my computer in the same record.
Similarly, on a functioning blockchain, banks can’t freeze your account. Because your assets are no longer just a string of characters on his computer, but are widely recognized on millions of computers.
At the same time, blockchain has extremely strong vitality. Bitcoin, banned by so many countries, has been able to survive for so many years and become more and more expensive because it is so hard to ban.
The world’s hundreds of thousands of computers that record the same bitcoin ledger are located in school rooms and homes in dozens of countries, deep in mountains and wilderness. No matter how hard you hit it, as long as there’s a machine in the world running the Bitcoin ledger, it won’t really die. About what is the block chain this question, you have to understand, more information, you can come to the coin check app to understand, and industry leaders together to discuss the future of the block chain.
Blockchain is not a mystery, in fact, the simplest ledger, but it can change the pattern of the entire financial industry, want to understand blockchain, after all, it is faster than most people imagine.